Chinese tech stocks send Hang Seng to biggest drop in three weeks on renewed concerns about regulatory crackdown
- Hang Seng Index slips 1.6 per cent, set for the biggest drag since August 20 as tech giants lead losses
- Tech index sinks on renewed regulatory concerns after Beijing summoned game developers and live-streaming platform operators for a meeting
Hong Kong stocks fell by the most in three weeks as concerns about regulatory tightening in China revived after Beijing chastised mobile games developers and probed a major stockbroker for market violations.
The Hang Seng Index tumbled 1.6 per cent to 25,898.67 at the local noon break, the most since August 20. The city’s tech benchmark sank 3.2 per cent, the most since July 27. The Shanghai Composite Index declined about 0.1 per cent to 3,678.59, while tech-heavy ChiNext stocks slid 1 per cent.
Tencent Holdings, China’s biggest game developer, led losses with a 5.5 per cent drop while its closest rival NetEase slumped 7 per cent. Alibaba Group Holding, the owner of this newspaper, lost 3.7 per cent while Meituan lost 2.4 per cent. Xiaomi fell 2.2 per cent.
Regulators summoned major game developers and streaming platform operators on Wednesday to a meeting to discuss how they will implement Beijing’s new restrictions on minors. It was also attended by the Cyberspace Administration of China and the Ministry of Culture and Tourism, Xinhua News Agency reported.
“Investors are worried whether there will be more regulations and there is a risk of this spreading to other industries,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators. “The policy disruptions is less severe than before but people are observing [the situation].”
Separately, China’s second-largest brokerage Haitong Securities said the China Securities Regulatory Commission is investigating the firm for potential breaches. The stock slumped 7.1 per cent in Hong Kong and 8.5 per cent in Shanghai.
COFCO Engineering & Technology surged 301 per cent to 14.25 yuan on its first day of trading. Beijing Caishikou Department Store jumped 44 per cent to 14.40 yuan while Shanghai Yizhong Pharmaceutical rallied 35 per cent to 51.51 yuan in their onshore debut.
China released its inflation data on Thursday, showing consumer inflation slowed while factory-gate prices rose to 13-year high amid higher commodity prices and also due to low year-ago base effects. Producer price index jumped 9.5 per cent in August from a year earlier, versus a 9 per cent pace in July.
Traders are monitoring the European Central Bank meeting later Thursday for signs policymakers are scaling back stimulus. The ECB will shed light on its plan for bond purchases in the fourth quarter amid economic reopening while the delta variant spread.
Author: Iris Ouyang, SCMP